Tax software for renting out a room
Just curious if anyone knows what do it yourself tax software would be best for a condo where I have one roommate (I own the condo, he is renting a room from me). I've always used TaxAct in the past before I started renting out a room, but it doesn't seem to work that nicely for this. My taxes are relatively simple, so I would prefer to self-prepare, but am open to a CPA if none of the major software works well for this.
TurboTax Premier and higher versions will handle the situation you describe.
When you rent out part of your property, you divide certain expenses between the part of the property used for rental and the part of the property allocated to your personal use, as though you actually had two separate pieces of property. When you tell TurboTax that you are renting out part of the home that you also live in, TurboTax will consider the area of the space you rent out (bedroom, floor, whatever) as the rental property. TurboTax has a guided interview that will let you allocate the rental portion of your home based on square footage or however you deed appropriate. TurboTax will even do the math for you to divide the amount of your total expenses between the rental and the personal residence portion of your home.
Dave Toelkes In your opinion, are those versions of TT able to help customers calculate cost basis of rentals correctly?
@Daniel Hyman,
Speaking only to the TurboTax Premier and Home and Business desktop versions. When the taxpayer sets up a new depreciable asset, there is a guided interview that asks pertinent questions that would properly calculate the depreciation basis for a rental property, even for the rental portion of a primary residence. A TurboTax user, setting up a depreciable asset for the first time, may have a little difficulty with the language and terminology used. There is an on-board help manual, although the first time user may still have some difficulty understanding how to respond to some of the guided interview questions while navigating through the setup screens. TurboTax does mitigate this to some extent through real-time validation for some responses.
For those TurboTax users that need a little handholding, there is a Help button that links to a "live community" discussion forum where experienced users and TurboTax staff can answer specific questions. For those that need real-time help, TurboTax does provide phone chat support.